Where next for Australia? Hell? Redemption? Mediocrity? Michael Clarke, as candid in word as he was confused with the bat the past two months, admitted in the dark moments of Ashes defeat today that they are rightly rated fifth in the world – and says England "have the talent to be ranked No1".

That is some mouthful for an Australia captain, even one who still considers himself a stand-in for the injured Ricky Ponting.

Clarke has impressed immensely in his brief tenure. He has been derided in the media, booed in the stands and utterly destroyed in the scorebook. Yet he has kept his explanations short and considered, neither railing at provocative questions nor dodging the really tough ones.

However, the awful truth for Clarke and Australian cricket to confront over the next year, and the period leading up to the 2013 Ashes in England, is that they are starting from as low a base as any in the past 30 years.

"This is probably as close to rock bottom as it gets," he said in the bowels of the SCG, the celebratory chants of the Barmy Army still filling the air outside.

He said he did not want Ponting's job and expected him to return when recovered from the broken finger that put him out of the fifth Test after a run as miserable as his own. Clarke also revealed he was retiring from Twenty20 cricket to concentrate on his Test career, as well as the 50-over format, and admitted he would "have to work my backside off" to hold his place.

"Every individual sits in the same shoes," was his mixed metaphor covering it. "Certain Cricket Australia board members and the selectors will discuss the result of this series."

He got his apology for Australia's performance out of the way in big chunks of honest appraisal – and, intentionally or not, none of it sounded supportive of their biggest disappointment, Mitchell Johnson, whose bowling was as unreliable as a Sydney taxi. In doing so, he paid England a significant compliment.

"We probably are fairly rated at fifth [in the world], but I think we are a better team than that. I know we have a lot of talent. The reality is we haven't performed well enough to be rated any higher. England have the talent, like all of us, to be ranked No1 if they can continue to play the cricket they have shown in this series.

"We 100% have to learn from what England did. Their performance not only with bat and ball but in the field was outstanding. There's a great starting point, to be able to turn up day in, day out for five Test matches and perform as well as they did. It takes a lot of mental strength, it takes a lot of discipline. It takes a lot of planning before the series.

"They've done that very well. Their bowlers have executed their plans outstandingly to all of our batters, and their batters have cashed in when we haven't bowled in the right areas."

Nobody on either side had a more wretched time with the ball than Johnson. His immediate future, at least, must be in question.

Among the coming bowlers well-placed to be given a chance is James Pattinson, the 20-year-old brother of Darren, who played one Test for England before being discarded. James, quick, strong and accurate, plays in the Prime Minister's XI match in Canberra on Sunday, a fixture that takes on added significance after the Test bowlers' unconvincing performances for most of this series.

Clarke does not anticipate a lot of blood on the walls, though. "No doubt England have outplayed us through this series, in all facets of the game," he said. "We've been extremely inconsistent. Certain guys have been able to take five-wicket hauls or make a century, but certainly not enough to win a big series. But I don't think there's a crisis in Australian cricket at all. We need a lot of improvement in our game, in all areas. But I do believe we have the talent and potential in that changing room to do it."

Still, there was no escaping that this was his lowest moment in cricket. "Unfortunately I've lost a few Ashes series now and they're all pretty bad. But being the vice-captain and having such a disappointing series with the bat, it probably is the lowest point."

It would be a major shock, however, if Australia abandoned Clarke and Ponting, even though they have had the worst series of their careers with the bat, and in charge of a team that has often seemed utterly lost. Ponting is desperate not to leave the game without a chance to get back at England, perhaps not as captain and probably down the order as a batsman. With few alternatives, Clarke is likely to hold on to the captaincy, whatever his loyalty to Ponting.

He seized on the few embers of hope from the wreckage, although it was not a convincing defence of selections that have dumbfounded most observers. "When you're not winning, you try and change things to get a different result and that's what the selectors have done. We all have to start somewhere so, when you make your debut, you get an opportunity.

"Usman Khawaja is a great example, a young guy who comes in and looks like he has a lot of talent, and I know he's going to have a lot of success for Australian cricket going forward. If Ricky didn't get injured, he might not have got that chance. Even young Steve Smith showed mental strength and the courage of a young player batting today."

Smith, whom Clarke did not bowl until the 102nd over of England's innings and who bashed an ugly half-century at the end, was feisty but peripheral. "I've been told that I've got to come into the side and be fun," he said when called up for the Perth Test. That Johnson-inspired win was the last time he had the opportunity for even half a smile.

He might well blossom into "the most promising leg-spinner since Shane Warne", as some enthusiasts have called him, but there is precious little evidence of that yet. Michael Beer, the Warne-sponsored left-arm spinner, looks a better bet.

Elsewhere, it is a depressing landscape for Australia, their reluctant stand-in captain and supporters who, in the end, had to admit their cricket team have fallen a very long way from the summit.